If you had identified the property, the cost, the travel cost would be added to the basis of the property and depreciated.These initial investigatory costs are treated differently for flipping and rentals1) Flipping: the travel cost to investigate will be treated as a business cost and deducted as an ordinary travel cost.

The rental losses would not be eligible to offset your other income(Ordinary income or portfolio income).

I put in a patio behind the outside.

That puts pressure on most ordinary people.

Part III #1 line has zero ordinary income and #2 line has negative net rental real estate income. 

We'll be outside on the patio. 

Any 'ordinary and necessary expenses' you'll be able to deduct at tax time and these include regular maintenance, supplies for upkeep, insurance, taxes, utilities, etc.  

It's a bit more expensive than Type M, what's normally used in ordinary residential plumbing. 

So, now you have rental income that you are taxed at your ordinary rate, and passive deductions with no rental income to offset (other than your other unit that is rented).This is one of the reasons why its not advisable to own a property under a LLC that you live in.Consult a qualified professional. 

we bought one for 7.2 million that the family owned for ever.. they just paid their cap gains.I would think but of course you probably have this figured but if your creating lots for inventory and selling to the public thats Ordinary income not cap gains  .. but as U point out if your in the business your depreciation will help substantially.